Will The Volume Ever Return To This Market?

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These days the trading volume is extremely light. The three month average trading volume on the SPDR S&P 500 Index (NYSE:SPY) is around 202 million shares a day. The trading volume on the SPY since December 19, 2012 has been around 125 million shares a day. Normally, the daily volume will decline around the holiday period, however, the volume will usually pick up around the corporate earnings season. So far, the trading volume on the SPY and the major stock indexes has not increased at all during this earnings season. Light volume will generally favor the upside in most markets. All traders and investors should remember the old market adage that states, a trader should never short a dull market. Well, light volume is the word that should be used instead of the word dull.

This afternoon, at 3:00 pm EST the trading volume on the SPY is around the 98 million level. Once again, the SPY floats higher throughout the day after a minor intra-day decline. All traders must respect the upside when the markets have this ridiculously light volume day after day. If corporate earnings and European news cannot bring volume into this market perhaps it will remain this way for a little while longer.